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They are called rats, and they have become a symbol of Beijing’s red-hot real estate market. Because of soaring housing costs, there are at least a million people living underground, only able to afford a rented room in the basements of skyscrapers or converted bomb shelters in their nation’s capital.

"It's not worth shopping in China," said one disgruntled middle-class Chinese consumer, adding, "If you can wait, do it elsewhere." The reason is simple - massive price inflation. As the WSJ reports, clothing and other apparel is on average 70% more expensive for consumers in China than in the US.

Having blamed the entire financial crisis on one reporter (despite the implicit government encourage of people to "invest in stocks"), detained "malicious sellers" (which killed the entire futures market), and now cracking down on overly-aggressive stock-pumping by "sinister stock squads," we thought we had seen it all from China. Until now... CHINA OFFICIAL: LUCKY THAT STOCK BUBBLE BURST BEFORE TOO LATE... "Too Late"? or "Just Right"? for a bubble to burst...

This article is the third in Foroohar’s series on Chinese business developments and their effects on the global economy; read earlier installments here and here. There are many questionable bits of conventional wisdom about China, but one of the most persistent is this: The Middle Kingdom must get rich before it becomes free.

This article is the third in Foroohar’s series on Chinese business developments and their effects on the global economy; read earlier installments here and here. There are many questionable bits of conventional wisdom about China, but one of the most persistent is this: The Middle Kingdom must get rich before it becomes free.

As President Obama and Chinese president Xi Jinping meet up in California today, there’s talk of a new kind of G2 alliance between the nations, and even a “grand bargain” over issues like trade, the structure of global institutions such as the IMF and the World Bank, and security issues. The idea is to reset relations between the two countries, which have been tense in recent years, and hopefully restart world growth, which has been lagging, in the process. It’s a wise goal. China and the U.S. are now the two strongest legs of the stool that is the global economy (Europe is faltering).